Rayovac 2009 Annual Report Download - page 144

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
into Amendment No. 2 to the senior secured term credit facility agreement to give effect to certain technical amendments to the senior secured term credit
facility agreement. (See also Note 8, Debt, for a more complete discussion of the amendments.)
In order to consummate the Plan, the Debtors obtained a $242,000 asset−based exit loan facility pursuant to a credit agreement among the Debtors,
General Electric Capital Corporation, as the administrative agent, co−collateral agent, swingline lender and supplemental loan lender, Bank of America,
N.A., as co−collateral agent and L/C Issuer, RBS Asset Finance, Inc., through its division RBS Business Capital, as syndication agent and the lenders party
thereto.
Accounting for Reorganization
Subsequent to the date of the Bankruptcy Filing (the “Petition Date”), the Company’s financial statements are prepared in accordance with ASC
Topic 852, “Reorganizations,” formerly the American Institute of Certified Public Accountants’ Statement of Position 90−7, Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code (“ASC 852”). ASC 852 does not change the application of GAAP in the preparation of the
Company’s consolidated financial statements. However, ASC 852 does require that financial statements, for periods including and subsequent to the filing
of a Chapter 11 petition, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.
In accordance with ASC 852 the Company has done the following:
• On the four column consolidated statement of financial position as of August 30, 2009, which is included in this Note 2, Voluntary
Reorganization Under Chapter 11, separated liabilities that are subject to compromise from liabilities that are not subject to compromise;
• On the accompanying Consolidated Statements of Operations, distinguished transactions and events that are directly associated with the
reorganization from the ongoing operations of the business;
• On the accompanying Consolidated Statements of Cash Flows, separately disclosed Reorganization items expense (income), net, consisting of
the following: (i) Fresh−start reporting adjustments; (ii) Gain on cancelation of debt; and (iii) Administrative related reorganization items;
• Ceased accruing interest on the Predecessor Company’s then outstanding senior subordinated notes; and
• Presented Consolidating Financial Statements of entities not in Chapter 11 proceedings in Note 17, Consolidating Financial Statements. These
Consolidating Financial Statements of the Company’s entities not in Chapter 11 proceedings have been prepared on the same basis as the
Company’s accompanying Consolidated Financial Statements.
Liabilities Subject to Compromise
Liabilities subject to compromise refer to known liabilities incurred prior to the Bankruptcy Filing by those entities that filed for Chapter 11
bankruptcy. These liabilities are considered by the Bankruptcy Court to be pre−petition claims. However, liabilities subject to compromise exclude
pre−petition claims for which the Company has received the Bankruptcy Court’s approval to pay, such as claims related to active employees and retirees
and claims related to certain critical service vendors. Liabilities subject to compromise are subject to future adjustments that may result from negotiations,
actions by the Bankruptcy Court and developments with respect to disputed claims or matters arising out of the proof of claims process whereby a creditor
may prove that the amount of a claim differs from the amount that the Company has recorded.
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